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The effects of industry relatedness and takeover motives on cross-border acquisition completion

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  • Lim, Mi-Hee
  • Lee, Ji-Hwan

Abstract

This study builds on behavioral perspectives about risky decision-making and aims to identify the industry- and firm-level factors that affect decision makers' expected returns, perceived risk, and attitude toward risk. Together, these three criteria lead to the ultimate completion or abandonment of a cross-border acquisition after a public announcement. By using data from 1985–2008, this study presents empirical results from cross-border acquisitions. The results show that a cross-border acquisition deal is more likely to succeed when the degree of relatedness between an acquirer's and a target's businesses is high. The findings also show that acquisitions with strategic rather than financial motives are more likely to succeed.

Suggested Citation

  • Lim, Mi-Hee & Lee, Ji-Hwan, 2016. "The effects of industry relatedness and takeover motives on cross-border acquisition completion," Journal of Business Research, Elsevier, vol. 69(11), pages 4787-4792.
    • Handle: RePEc:eee:jbrese:v:69:y:2016:i:11:p:4787-4792
    DOI: 10.1016/j.jbusres.2016.04.031
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